The Bank of Jamaica says it’s monitoring increases in inflation this year and is confident it will remain within projected levels despite the upward trend.
In a social media post this afternoon the Central Bank says many of the temporary shocks which have driven inflation up in recent months have already begun to alleviate.
Noted Economist Damien King took to social media this afternoon pointing out that inflation for 2019 may reach 6 per cent.
This is the upper limit of the Bank of Jamaica’s inflation target range which falls between 4 to 6 per cent.
He was concerned that the BOJ may have too aggressively loosened its monetary policy.
However, in response the BOJ says the rise in inflation is something they’re watching.
It says the last recorded figure for inflation in November was four- point-6 per cent which was mainly affected by a sharp jump in agricultural food prices.
This the central bank says was caused by bad weather conditions mainly drought followed by heavy rains which affected the island between June and October.
It says without this abnormal and temporary increase in food prices, core inflation at November was only 2.8 per cent.
The BOJ says it recognizes that given the outturn for November, inflation over the next four months is likely to be higher than previously forecasted.
However, it says preliminary information, suggests that vegetable prices peaked in November 2019 and are already trending down.
The Central Bank says it has already observed substantial declines in the prices for lettuce, carrot, sweet pepper and potato along with escallion, cucumber and banana in December 2019.
It says if these reductions are reflected in STATIN’s measure of inflation for December 2019, then inflation should remain within the Bank’s target of four to six-per cent going into 2020.